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Business

Elon Musk manages free speech versus ‘hellscape’ at Twitter

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Oct 28 (Reuters) – Mere hours after Elon Musk kicked off a new era at Twitter Inc, the billionaire owner was deluged with pleas and demands from banned account holders and world leaders.

The flood of requests underscore the challenge the CEO of electric car maker Tesla Inc (TSLA.O) faces, balancing a promise to restore free speech while preventing the platform from descending into a “hellscape,” as he had vowed in an open letter to advertisers on Thursday.

Former U.S. President Donald Trump, who was permanently banned from Twitter over accusations of inciting violence after the Jan. 6, 2021 capitol riots, welcomed the takeover, but said little about a return to Twitter. “I am very happy that Twitter is now in sane hands, and will no longer be run by Radical Left Lunatics and Maniacs who truly hate our country.” read more

Dmitry Medvedev, former Russia president and current deputy chairman of Russia’s Security Council, tweeted his congratulations: “Good luck @elonmusk in overcoming political bias and ideological dictatorship on Twitter. And quit that Starlink in Ukraine business.”

Others asked Musk to reverse penalties inflicted by the social media platform. In response to @catturd2, an anonymous account with 852,000 followers, known for being a big supporter of Trump’s election fraud claims, and who said it was “shadowbanned,” Musk tweeted “I will be digging in more today.”

The editor-in-chief of Russian state-controlled broadcaster RT, Margarita Simonyan, asked Musk to “unban RT and Sputnik accounts and take the shadow ban off mine as well?”

The pressure is mounting on Musk and Twitter as he is set to address the Twitter staff on Friday after closing the deal.

“Hey @ElonMusk, now that you own Twitter, will you help fight back against Trudeau’s online censorship bill C-11?” tweeted Canada Proud, an organization working to vote out Canadian Prime Minister Justin Trudeau.

“First I’ve heard,” Musk responded in a tweet on Friday.

DAY ONE

Several employees who spoke with Reuters on Friday said there had been no communication from management about what happens next.

Musk was expected to address employees on Friday, but the employees said they had not received any notice by the late afternoon.

Two sources familiar with the matter said Musk’s teams were investigating Twitter’s code and asking questions about how aspects of the platform work.

Musk appeared to have joined the company’s Slack channel by Friday, according to a screenshot seen by Reuters.

Musk also tweeted on Friday that Twitter will form a “content moderation council with widely diverse viewpoints,” and that no major decisions on moderation or account reinstatements will be made before it convenes.

Despite an appeal to advertisers on Thursday that he hoped to make Twitter “the most respected advertising platform in the world,” at least one major automaker – GM (GM.N) – said it temporarily paused its advertising and was working to “understand the direction of the platform under their new ownership.”

Employees also continued to fret about the future of their jobs. Fewer than 10% of 266 Twitter employees who participated in a poll on messaging app Blind expected to still have their jobs in three months. Blind allows employees to air grievances anonymously after they sign up with corporate emails.

Musk fired Twitter Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and legal affairs and policy chief Vijaya Gadde, according to people familiar with the matter. He had accused them of misleading him and Twitter investors over the number of fake accounts on the platform.

Agrawal and Segal were in Twitter’s San Francisco headquarters when the deal closed and were escorted out, the sources added.

Musk, who also runs rocket company SpaceX, plans to become Twitter’s interim CEO, according to a person familiar with the matter and following an earlier report by Reuters. Musk also plans to scrap permanent bans on users, Bloomberg said, citing a person familiar with the matter.

Twitter, Musk and the executives did not immediately respond to requests for comment.

‘CHIEF TWIT’

Before closing the deal, Musk walked into Twitter’s headquarters on Wednesday with a big grin and a porcelain sink, subsequently tweeting “let that sink in.” He changed his Twitter profile description to “Chief Twit.”

European regulators also reiterated past warnings that, under Musk’s leadership, Twitter must still abide by the region’s Digital Services Act, which levies hefty fines on companies if they do not control illegal content.

“In Europe, the bird will fly by our EU rules,” EU industry chief Thierry Breton tweeted on Friday morning.

European Parliament lawmaker and civil rights proponent Patrick Breyer suggested people look for alternatives where privacy is a priority.

“Twitter already knows our personalities dangerously well due to its pervasive surveillance of our every click. Now this knowledge will be falling into Musk’s hands.”

Musk has indicated he sees Twitter as a foundation for creating a “super app” that offers everything from money transfers to shopping and ride-hailing.

But Twitter is struggling to engage its most active users who are vital to the business. These “heavy tweeters” account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue.

Musk will face a challenge building revenue “given that the controversial opinions he appears to want to give more of a free rein to are often unpalatable to advertisers,” said Hargreaves Lansdown analyst Susannah Streeter.

As news of the deal spread, some Twitter users were quick to flag their willingness to walk away.

“I will be happy to leave in a heartbeat if Musk, well, acts as we all expect him to,” said a user with the @mustlovedogsxo account.

Reporting by Sheila Dang in Dallas; additional reporting by David Shepardson and Katie Paul; Editing by Kenneth Li, Nick Zieminski, Deepa Babington and Jacqueline Wong

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Business

Zuckerberg to testify in U.S. case against Facebook’s virtual reality deal

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Oct 28 (Reuters) – Meta Platforms Inc (META.O) Chief Executive Officer Mark Zuckerberg will testify in a case by the Federal Trade Commission (FTC) that argues the company’s proposed deal to buy virtual reality (VR) content maker Within Unlimited should be blocked.

In a court document filed with U.S. District Court Northern District Of California on Friday, the FTC listed 18 witnesses it plans to question, including Zuckerberg, Within CEO Chris Milk and Meta Chief Technology Officer Andrew Bosworth.

They were also on a list of witnesses submitted on Friday by defendants Meta and Within.

In addition to defending the Within acquisition, Zuckerberg is expected to be questioned about the Facebook-parent’s strategy for its VR business, as well as the company’s plans to support third-party developers, according to the court document.

The FTC had filed a lawsuit in July saying that Meta’s acquisition of Within would “tend to create a monopoly” in the market for VR-dedicated fitness apps.

The regulator argues that the proposed deal would “substantially lessen competition or tend to create a monopoly” in that market. read more

Meta, in court documents, has argued that “the FTC’s conclusory, speculative, and contradictory allegations do not plausibly plead any facts to establish that any supposed market for VR Deliberate Fitness apps is ‘oligopolistic’ as to either behavior or structure.” read more

Facebook agreed to buy Within in October 2021 for an undisclosed sum.

Reporting by Ismail Shakil in Ottawa; Editing by Aurora Ellis

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Business

Musk begins his Twitter ownership with firings, declares the ‘bird is freed’

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  • Musk says the “bird is freed” after $44 billion deal
  • Musk fires Twitter CEO, CFO, policy chief
  • Some Twitter users flag willingness to walk away
  • Poll shows employee job concerns
  • EU warns: “This bird will fly by our rules”

Oct 28 (Reuters) – Elon Musk has taken ownership of Twitter Inc (TWTR.N) with brutal efficiency, firing top executives but providing little clarity over how he will achieve the ambitions he has outlined for the influential social media platform.

“The bird is freed,” he tweeted after he completed his $44 billion acquisition on Thursday, referencing Twitter’s bird logo in an apparent nod to his desire to see the company have fewer limits on content that can be posted.

The CEO of electric car maker Tesla Inc (TSLA.O) and self-described free speech absolutist has, however, also said he wants to prevent the platform from becoming an echo chamber for hate and division.

Other goals include wanting to “defeat” spam bots on Twitter and make the algorithms that determine how content is presented to its users publicly available.

Yet Musk has not offered details on how he will achieve all this and who will run the company. He has said he plans to cut jobs, leaving Twitter’s 7,500 employees fretting about their future. He also said on Thursday he did not buy Twitter to make more money but “to try to help humanity, whom I love.”

In a running poll on messaging app Blind about whether Twitter employees will be employed in the company in three months, less that 10% voted “yes.” Of the 266 participants, 38% said “No” and over 55% chose the “popcorn” option. Blind allows anonymous messaging by employees to air their grievances where people can sign up with their corporate emails.

Musk fired Twitter Chief Executive Parag Agrawal, Chief Financial Officer Ned Segal and legal affairs and policy chief Vijaya Gadde, according to people familiar with the matter. He had accused them of misleading him and Twitter investors over the number of fake accounts on the platform.

Agrawal and Segal were in Twitter’s San Francisco headquarters when the deal closed and were escorted out, the sources added.

Musk, who also runs rocket company SpaceX, plans to become Twitter’s CEO after completing the acquisition and also plans to scrap permanent bans on users, Bloomberg reported, citing a person familiar with the matter.

Twitter, Musk and the executives did not immediately respond to requests for comment.

‘CHIEF TWIT’

Before closing the deal, Musk walked into Twitter’s headquarters on Wednesday with a big grin and a porcelain sink, subsequently tweeting “let that sink in.” He changed his Twitter profile description to “Chief Twit.”

He also tried to calm employee fears that major layoffs are coming and assured advertisers that his past criticism of Twitter’s content moderation rules would not harm its appeal.

“Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences!” Musk said in an open letter to advertisers on Thursday.

As news of the deal spread, some Twitter users were quick to flag their willingness to walk away.

“I will be happy to leave in a heartbeat if Musk, well, acts as we all expect him to,” said a user with the @mustlovedogsxo account.

European regulators also reiterated past warnings that, under Musk’s leadership, Twitter must still abide by the region’s Digital Services Act, which levies hefty fines on companies if they do not control illegal content.

[1/2] Twitter logo and a photo of Elon Musk are displayed through magnifier in this illustration taken October 27, 2022. REUTERS/Dado Ruvic/Illustration

“In Europe, the bird will fly by our EU rules,” EU industry chief Thierry Breton twitted on Friday morning, posting in a self-reply a short video of Breton and Musk after their meeting last May.

In an indication of the challenges ahead, Bollywood actress Kangana Ranaut, who was banned from Twitter last year for violating its rules on hateful and abusive conduct, applauded Musk’s takeover on Instagram and shared requests from fans to have her account restored.

Musk also said in May he would reverse the ban on Donald Trump, who was removed after the attack on the U.S. Capitol. The former U.S. president has said he won’t return to the platform and has instead launched his own social media app, Truth Social.

A representative for Trump did not immediately respond to a Reuters request for comment.

Musk has indicated he sees Twitter as a foundation for creating a “super app” that offers everything from money transfers to shopping and ride-hailing.

But Twitter is struggling to engage its most active users who are vital to the business. These “heavy tweeters” account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue.

A SAGA

The deal’s road to fruition was full of twists and turns that sowed doubt over whether it would happen at all. It began on April 4, when Musk disclosed a 9.2% Twitter stake, becoming the company’s largest shareholder.

The world’s richest person then agreed to join Twitter’s board, only to balk at the last minute and offer to buy the company instead for $54.20 per share, an offer that Twitter thought might be another of Musk’s cannabis jokes.

Musk’s offer was real, and over the course of just one weekend later in April, the two sides reached a deal at the suggested price. This happened without Musk carrying out any due diligence on the company’s confidential information.

In the weeks that followed, Musk had second thoughts. He complained publicly about Twitter’s spam accounts and his lawyers then accused Twitter of not complying with his requests for information on the subject.

The acrimony resulted in Musk telling Twitter on July 8 he was terminating the deal. Four days later, Twitter sued Musk to force him to complete the acquisition.

By then, the stock market had plunged on concerns about a potential recession. Twitter accused Musk of buyer’s remorse, arguing he wanted out of the deal because he thought he overpaid.

Most legal analysts said Twitter had the strongest arguments and would likely prevail in court.

On Oct. 4, just as Musk was set to be deposed by Twitter’s lawyers, he performed another U-turn, offering to complete the deal as promised. He managed to do that, just one day ahead of a deadline given by a judge to avoid going to trial.

Twitter shares ended trade on Thursday up 0.3% at $53.86, just under the agreed price. The stock will be delisted from the New York Stock Exchange on Friday.

Reuters Graphics Reuters Graphics

Reporting by Sheila Dang and Greg Roumeliotis in New York; Additional reporting by Tanvi Mehta in New Delhi and Miyoung Kim in Singapore; Editing by Nick Zieminski, Edwina Gibbs and Matt Scuffham

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Business

Goldman plans major reorganization to combine key units -source

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LONDON/NEW YORK, Oct 16 (Reuters) – Goldman Sachs (GS.N) is planning a major reorganization to combine its biggest businesses into three divisions with its investment banking and trading businesses being merged into a single unit, a source familiar with the matter told Reuters.

The plans are expected to be announced on Oct. 18 alongside Goldman’s third quarter earnings. Marcus, Goldman’s consumer banking business, will be absorbed into the wealth unit, the source said, confirming an earlier Wall Street Journal report.

A spokesperson for Goldman Sachs declined to comment.

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This is the biggest shakeup since the company’s investor day in early 2020 when it outlined plans for four core units: investment banking, global markets, consumer and wealth management and asset management.

“It’s a head scratcher,” said Mike Mayo, a banking analyst at Wells Fargo. “Right now, there are more questions than answers for Goldman Sachs as it relates to this potential restructuring.”

The move comes as the Wall Street titan seeks to boost its income from fee-based businesses and cut its reliance on volatile trading and investment banking revenues. The changes also signal Marcus, the consumer unit, is being relegated after Chief Executive Officer David Solomon expressed big ambitions to build a mainstream digital bank.

“This may be a way to put Marcus to the back burner as a way to de-emphasize its importance as an investment opportunity,” Mayo said.

Solomon, who became CEO in 2018, has sought to expand Goldman’s footprint in retail banking since his early days at the helm.

But the consumer banking unit that launched in 2016 has struggled to gain traction and suffered from delays. Marcus has yet to launch a checking account that was scheduled for this year. At mid-year, the bank internally forecast that Marcus’ losses would accelerate to more than $1.2 billion in 2022, for cumulative losses of more than $4 billion, Bloomberg reported. Goldman declined to comment on the loss.

Solomon has said the business could generate revenue of over $4 billion by end of 2024.

Net revenue in the consumer-banking unit grew by 23% to $1.49 billion in 2021, reflecting higher credit card and deposit balances, the bank said in its annual report.

Marcus offers digital banking products such as loans, savings and certificate of deposits. It also provides credit cards via a partnership with Apple Inc (AAPL.O).

The consumer business serves more than 14 million customers and had more than $100 billion in deposits with over $16 billion in cards and loans balances, the bank has said.

GOLDMAN SACHS’ OVERHAUL KEEPS MANAGEMENT “ON ITS TOES”

The combined investment banking and trading group will be overseen by Dan Dees and Jim Esposito, who are currently global co-heads of Goldman’s investment banking, and Ashok Varadhan, now co-head of its global markets division, according to Bloomberg.

Marc Nachmann, the bank’s global co-head of the global markets division, will move to help run the combined asset- and wealth-management arm, the report said.

Marcus will become a part of the asset and wealth management unit, the report added.

“This is a way for Goldman Sachs to keep its management team on its toes and to reinforce the intensity that defines Goldman,” Mayo said.

Such an organizational overhaul of the bank comes shortly after its global job cuts in September that could have impacted hundreds of bankers.

In the second quarter, Goldman reported a 48% slump in profit that beat forecasts as fixed-income and commodities trading surged.

Like its Wall Street rivals, the bank is expected to report a sharp drop in third-quarter net profit as investment banking revenue was badly hurt by a slump in dealmaking.

Goldman is expected to deliver a net profit of $2.77 billion in the third quarter, according to analysts’ forecasts compiled by Refinitiv, down from $5.38 billion a year earlier.

Given the tough operating environment, Goldman is closely re-examining all of its forward spending and investment plans to ensure the best use of its resources, Barclays said in a recent report.

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Reporting by Pamela Barbaglia in London, Lavanya Ahire and Akriti Sharma in Bengaluru, Selena Li in Hong Kong, Saeed Azhar in New York; Editing by Sherry Jacob-Phillips and Muralikumar Anantharaman

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Business

Elon Musk is under federal investigation, Twitter says in court filing

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WILMINGTON, Del., Oct 13 (Reuters) – Elon Musk is being investigated by federal authorities over his conduct in his $44 billion takeover deal for Twitter Inc (TWTR.N), the social media company said in a court filing released on Thursday.

While the filing said he was under investigations, it did not say what the exact focus of the probes were and which federal authorities are conducting them.

Twitter, which sued Musk in July to force him to close the deal, said attorneys for the Tesla Inc (TSLA.O) CEO had claimed “investigative privilege” when refusing to hand over documents it had sought.

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In late September, Musk’s attorneys had provided a “privilege log” identifying documents to be withheld, Twitter said. The log referenced drafts of a May 13 email to the U.S. Securities and Exchange Commission (SEC) and a slide presentation to the Federal Trade Commission (FTC).

The court filing, which asked a Delaware judge to order the Musk’s attorneys to provide the documents, was made on Oct. 6 – the same day that the judge that paused litigation between the two sides after Musk reversed course and said he would proceed with the deal.

“This game of ‘hide the ball’ must end,” the company said in the court filing.

Alex Spiro, an attorney for Musk, told Reuters that Twitter’s court filing was a “misdirection.” Twitter declined to comment on Spiro’s response and to Reuters queries about its understanding of any investigation into Musk.

The SEC did not immediately respond to request for comment and the FTC declined to comment.

The SEC has questioned Musk’s comments about the Twitter acquisition. In April, the SEC asked Musk whether the disclosure of his 9% Twitter stake was late and why it indicated that he intended to be a passive shareholder. Musk later refiled the disclosure to indicate he was an active investor.

In June, the SEC asked Musk in a letter whether he should have amended his public filing to reflect his intention to suspend or abandon the deal.

The Information, a tech news site, reported in April that the FTC was scrutinizing whether Musk failed to comply with an antitrust reporting requirement as he amassed his stake in Twitter.

Twitter said in June that the takeover deal with Musk had cleared an antitrust waiting period for review by the FTC and U.S. Justice Department. read more

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Reporting by Tom Hals in Wilmington, Delaware, Sheila Dang in Dallas and Hyunjoo Jin in San Francisco; Editing by Chris Reese and Edwina Gibbs

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Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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Business

U.S. grocer Kroger in talks to merge with rival Albertsons -sources

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Oct 13 (Reuters) – U.S. grocery company Kroger Co (KR.N) is in talks to merge with smaller rival Albertsons Companies Inc (ACI.N) in a tie-up that would create a supermarket titan, people familiar with the matter said.

The merger of the nation’s No. 1 and 2 standalone grocers, if reached, could provide the retailers with a leg up in negotiations with consumer-product makers such as Procter & Gamble (PG.N) and Unilever (ULVR.L) at a time of steep price hikes.

A deal could be announced as soon as this week if the talks do not fall apart, said the sources, who requested anonymity as the discussions are confidential.

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Major consumer products companies across the world have announced plans to boost prices at a faster pace as they seek to curb the impact of soaring raw materials costs on their margins.

Some critics noted that a supermarket merger would lessen competition among U.S. grocery chains and potentially lead to higher prices for American shoppers. A deal would create a combined company with a market valuation of about $47 billion, representing one of the biggest mergers in recent years in the retail space.

Neither Kroger nor Albertsons immediately responded to requests for comment. The news was first reported by Bloomberg.

Consultant Burt Flickinger, who holds shares of both Kroger and Albertsons, said a merger would give the two supermarket operators more buying power, making it easier for them to compete with Walmart Inc (WMT.N).

Groceries constitute roughly 55% of Walmart’s annual sales. Walmart traditionally has used its clout to demand the lowest possible prices from packaged-food and beverage companies, leaving rivals at a disadvantage in their own negotiations with suppliers.

Roughly 25% of all dollars spent on groceries in the United States are spent at Walmart, according to data provided by Euromonitor. Kroger and Albertsons have roughly 8% and 5% of the U.S. grocery market, respectively, according to Euromonitor.

COMPETING POWER

The specter of Amazon may have contributed to the merger talks as well. Michael Pachter, an analyst at Wedbush Securities, estimated the online retailer has taken about $4 billion in market share from Kroger and Albertsons in the past two years — small relative to an $800 billion grocery market but a threat nonetheless. “Amazon scares the bejeezus out of the conventional retailers,” he said.

The Seattle-based technology company is betting that the cashierless and contactless payment systems it is adding to stores, including at its subsidiary Whole Foods Market, will win it customers in the long run.

Shares of Albertsons were up 11% on Thursday afternoon, while Kroger’s stock slipped 1.4%. Shares of British online supermarket and technology group Ocado Group Plc (OCDO.L) were up over 10% in late London trade. Kroger is Ocado’s biggest client.

Kroger houses supermarket chains such as Fred Meyer, Ralphs and King Soopers. Boise, Idaho-based Albertsons includes the Safeway banner.

The razor-thin margins of standalone U.S. supermarket chains have been squeezed from soaring costs and supply-chain disruptions after a boom at the height of the pandemic.

Sarah Miller, executive director of the American Economic Liberties Project, an anti-monopoly nonprofit, said the deal would “squeeze consumers already struggling to afford food.”

“This merger is a cut and dried case of monopoly power, and enforcers should block it,” Miller said.

A deal could be reached as soon as this week, Bloomberg reported, adding that no final decision has been taken and talks could still be delayed or falter.

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Reporting by Anirban Sen and Abigail Summerville in New York; Additional reporting by Siddarth Cavale, Jessica DiNapoli and Arriana McLymore in New York, Jeffrey Dastin in San Francisco and Aishwarya Venugopal in Bengaluru; Editing by Sriraj Kalluvila, Matthew Lewis and Nick Zieminski

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Business

Toshiba shares jump on report of possible $19 bln buyout

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TOKYO, Oct 13 (Reuters) – Shares in Toshiba Corp (6502.T) on Thursday surged on a report that a domestic investor-led group was looking at a $19 billion bid – a potential deal that would likely lead to foreign activist shareholders being bought out after years of tension.

A consortium led by private equity firm Japan Industrial Partners and which also includes Chubu Electric Power Co (9502.T) has been given preferred bidder status in the second round of bidding, Kyodo news agency and other media have reported.

The 2.8 trillion yen figure cited by Kyodo would mark a 26% premium to Wednesday’s closing price.

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The shares were up 7% in afternoon trade, on track for their biggest one-day gain in more than a year. They have risen some 17% this year.

Once a storied conglomerate, Toshiba has been weakened by accounting and governance scandals. Attempts to turn itself around have been overshadowed in recent years by discord between management and its many activist shareholders.

The consortium will put up around 1 trillion yen in equity, with the rest of the money likely to come from bank loans, Kyodo said, adding that financing talks were ongoing and the offer value could change depending on future movements of Toshiba’s stock price.

Toshiba has declined to comment on the report.

It was not immediately clear how many bids Toshiba is seriously considering but the contest to take over the company is likely still an open race between Japan Industrial Partners and state-backed Japan Investment Corp, said Travis Lundy, a Quiddity Advisors analyst who publishes on the Smartkarma platform.

The two had previously joined forces to bid for Toshiba but have since gone their separate ways, sources have said. Japan Investment Corp has since been in talks with private equity firm Bain Capital, one of several overseas funds that passed the first round of bidding, local media have reported.

Toshiba and activist shareholders have been at odds over the direction of the company, with several large foreign funds pushing the conglomerate to consider private equity bids.

Tensions culminated last year when a shareholder-commissioned investigation concluded management had colluded with Japan’s trade ministry – which sees the company’s nuclear and defence technology as a strategic asset – to block overseas investors from gaining influence at its 2020 shareholder meeting.

“The only way to get rid of the activists is to buy them out,” Lundy said.

($1 = 146.8300 yen)

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Reporting by Sam Byford; Editing by David Dolan and Edwina Gibbs

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Business

Nissan takes $687 mln loss as sells Russian business for 1 euro

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  • Sale to Russian state-owned entity NAMI
  • Nissan has right to buy back business within six years
  • Renault sees 331 mln euro hit to H2 net income from move

TOKYO, Oct 11 (Reuters) – Nissan Motor Co Ltd (7201.T) will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), it said on Tuesday, taking a loss of around $687 million in the latest costly exit from the country by a global company.

The Japanese automaker transfer its shares in Nissan Manufacturing Russia LLC to state-owned NAMI, it said. The deal will give Nissan the right to buy back the business within six years, Russia’s industry and trade ministry said.

The deal makes Nissan the latest major company to leave Russia since Moscow sent tens of thousands of troops into Ukraine in February. It also mirrors a move by Nissan’s top shareholder, French automaker Renault (RENA.PA), which sold its majority stake in Russian carmaker Avtovaz (AVAZI_p.MM) to a Russian investor in May.

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The sale to NAMI will include Nissan’s production and research facilities in St Petersburg as well as its sales and marketing centre in Moscow, the ministry said.

Nissan said it expected an extraordinary loss of around 100 billion yen ($687 million), but maintained its earnings forecast for the financial year ending in March.

Renault, which owns 43% of Nissan, estimated the decision by its Japanese partner would lead to a 331 million euro hit to its net income for the second half of 2022.

Nissan had suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit had been monitoring the situation, it said. But there was “no visibility” of a change to the external environment, Nissan said, prompting it to decide to exit.

Junior alliance partner Mitsubishi Motors Corp (7211.T) is also considering exiting Russia, the Nikkei newspaper said. A spokesperson for Mitsubishi said nothing had been decided.

The exit comes as Nissan has embarked on a major shift in its relationship with Renault. The two said on Monday they were in talks about the future of their alliance, including Nissan considering investing in a new electric vehicle venture by Renault.

Those talks, which could prompt the biggest reset in the alliance since the 2018 arrest of long-time executive Carlos Ghosn, have also included the possibility of Renault selling some of its controlling stake in Nissan, two people with knowledge of the talks have told Reuters.

Renault reportedly sold its stake in Avtovaz for one rouble ($0.02).

The Nissan deal was “of great significance for the industry,” Russia’s Industry and Trade Minister Denis Manturov said in a statement.

($1 = 145.6200 yen)

($1 = 63.8500 roubles)

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Reporting by Gleb Stolyarov, Caleb Davis and Satoshi Sugiyama; Writing by Alexander Marrow and David Dolan; Editing by Louise Heavens and Mark Potter

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Business

Trump-tied SPAC delays vote after falling short on shareholder support

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NEW YORK, Oct 10 (Reuters) – The blank-check acquisition firm that agreed to merge with former U.S. President Donald Trump’s social media company postponed on Monday its shareholder vote to Nov. 3 after failing to garner enough support to win a 12-month extension.

At least 65% of the shareholders of Digital World Acquisition Corp (DWAC.O) needed to agree to the extension. The special purpose acquisition company (SPAC) opted to push back the deadline to try to find more votes.

Digital World, which had already pushed back the deadline for its shareholders to vote on the 12-month extension several times over the past month, fell short of that threshold on Monday.

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At stake is an over $1 billion private investment in public equity (PIPE) financing that Trump Media & Technology Group (TMTG) stands to receive from Digital World, which inked a go-public deal with the social media company in October 2021.

Digital World last month said it had received termination notices from PIPE investors who were pulling out about $139 million of the total financing commitment.

The transaction with TMTG has been on hold amid civil and criminal investigations into the circumstances around the deal. Digital World has not yet received approval from the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal.

Digital World is set to liquidate on Dec. 8, after managing to extend its life by three months in September.

Reuters reported last month that executives behind Digital World had failed to pay Saratoga Proxy Consulting, their proxy solicitors, for its work rallying shareholders for the vote.

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Reporting by Echo Wang in New York, additional reporting by Svea Herbst-Bayliss; Editing by Will Dunham

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Business

Musk, Twitter could reach deal to end court battle, close buyout soon, source says

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WILMINGTON, Del., Oct 5 (Reuters) – Elon Musk and Twitter Inc (TWTR.N) may reach an agreement to end their litigation in coming days, clearing the way for the world’s richest person to close his $44 billion deal for the social media firm, a source familiar with the matter told Reuters.

Musk, who is also chief executive officer of electric car maker Tesla Inc (TSLA.O), proposed to Twitter late on Monday he would change course and abide by his April agreement to buy the company for $54.20 per share, if Twitter dropped its litigation against him.

The two sides had been expected to reach a deal as early as Wednesday, but negotiations are continuing with a resolution expected to take more time, the source said.

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Twitter’s legal team, however, has yet to accept the agreement and Chancellor Kathaleen McCormick, the judge on Delaware’s Court of Chancery, said she was preparing for the looming trial.

“The parties have not filed a stipulation to stay this action, nor has any party moved for a stay. I, therefore, continue to press on toward our trial set to begin on Oct. 17, 2022,” McCormick wrote in a Wednesday court filing.

Musk’s proposal on Monday included a condition that the deal closing was pending the receipt of debt financing. The potential agreement would likely remove that condition, said the source, who requested anonymity as the discussions are confidential.

Twitter’s legal team and lawyers for Musk updated the judge on Tuesday with their attempts to overcome mutual distrust and find a process for closing the deal.

Two firms that were interested in partly financing the deal, Apollo Global Management Inc (APO.N) and Sixth Street Partners, had ended talks to provide up to a combined $1 billion, two sources told Reuters.

An attorney representing a proposed class action against Musk on behalf of Twitter shareholders said in a letter to McCormick that Musk should be required to make a “substantial deposit” in case he again reneges on his commitment to close. He should also be liable for interest delaying the closing of the deal, said the letter from attorney Michael Hanrahan.

It is not clear what led the Musk legal team to offer to settle, but Musk is scheduled to be deposed on Thursday in Austin, Texas. Questioning is expected to be tough, which provides Twitter leverage in talks to close the deal.

Shares of Twitter closed 1.3% lower at $51.30 on Wednesday. The stock on Tuesday hit its highest level since Musk and Twitter agreed in April that he would buy the company for $54.20 per share.

A DISTRACTION

Tesla stock ended down 3.5% on Wednesday as investors worry that Musk may have to sell more shares in the electric carmaker to fund the Twitter deal and that Twitter could be a distraction for the entrepreneur.

Musk sold $15.4 billion worth of Tesla stock this year, but analysts said he may have to raise an additional $2 billion to $3 billion provided that the rest of his financing remains unchanged.

Musk said in July he was walking away from the takeover agreement because he discovered Twitter had allegedly misled him about the amount of fake accounts, among other claims.

Part of Musk’s case was based on allegations by Twitter whistleblower Peiter “Mudge” Zatko that became public in August, and Musk’s legal team on Wednesday rejected the idea that they had inappropriate talks with Zatko or spoken with him before his concerns became public.

Twitter’s, legal team has wanted to investigate if Alex Spiro, a lawyer from legal firm Quinn Emanuel, who has led the case for Musk, communicated with the whistleblower as early as May.

Twitter lawyers were suspicious that Zatko sent an anonymous May 6 email to Spiro. The sender claimed to be a former Twitter employee, offered information about the company and suggested communicating by alternate means.

Spiro said in a filing with the court on Wednesday he never read the email until Twitter brought it to his attention and it appeared to be someone seeking a job. Spiro also said he was unaware of the existence of Zatko’s allegations before they became public on Aug. 23.

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Reporting by Tom Hals in Wilmington, Del., and Anirban Sen in New York; Additional reporting by Hyunjoo Jin in San Fransico
Editing by Nick Zieminski, Matthew Lewis and Sam Holmes

Our Standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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